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  • Daniel Gray CPA US Tax Services Toronto Canada

FIRPTA withholding is sometimes 10% not 15% (sale of US property by foreigner)

Effective for dispositions since February 16, 2016, Public Law (PL) 114-113, the Protecting Americans from Tax Hikes (PATH) Act, generally increased FIRPTA withholding tax on sale of US property from a foreigner to 15 percent of the amount realized.

But, surprise, 10% can still apply (against all the training of legal clerks and title assistants who handle the paperwork but who haven't studied the law itself in depth). For a sale of a property for use by the buyer as a residence where the amount realized by the seller is $1 million or less the withholding rate remained at 10%. This is verified in IRS Internal Revenue Manual (IRM) 21.8.5 Miscellaneous FIRPTA Related Issues.

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